Media giants fight to survive
By Miriam Steffens | smh.com.au | 15 June
APN News & Media's key shareholder, Independent News & Media, and Network Ten's majority owner, CanWest, have continued rescue talks with their lenders to find a way out of their debt woes. Creditor deadlines expire this week and next.
Independent News, which won a reprieve last month to repay a €200 million ($344 million) bond by June 26, has offered to pay bondholders 10 per cent of the €150 million in proceeds it expects from selling its outdoor advertising unit in South Africa and other assets, Irish reports said on the weekend.
The money would come on top of the €30 million its largest investors, retired chief executive Tony O'Reilly and billionaire Denis O'Brien, would contribute.
The talks are closely followed by Australian investors because of Independent's holding in APN - expected to fall to about 32 per cent after a $99 million equity raising by the Trans-Tasman publisher closes today.
Last month the Irish group's new boss, Gavin O'Reilly, dismissed speculation the company could put its APN stake back on the block to satisfy lenders.
Independent News told shareholders on Friday it expected to reach an "acceptable" agreement with its creditors, pushing its stock up 16 per cent - even as it warned profit would come in about 10 per cent lower than expected because of slumping advertising markets.
"Failing to hammer out a deal would just be "too appalling for everybody," Mr O'Reilly said.
"If you don't have a deal and you can't meet liabilities as they fall due it is a sobering day for everyone."
But he dismissed reports that the company had received an offer from the Russian billionaire, Alexander Lebedev, to buy its loss-making Independent newspaper.
APN is understood to have seen strong take-up for its $16 million retail equity raising that closes today, having already raised $83 million from institutional investors last month to help lower its own nearly $1 billion in debt.
Independent did not take part in the heavily discounted $1-a-share offer because of its debt squeeze. APN's shares closed at $1.575 on Friday.
Meanwhile in Canada, Ten's controlling shareholder CanWest has been racing against time to nut out a recapitalisation proposal by the close of business in Winnipeg today.
Seeking to stave off bankruptcy, its newspaper division on Friday reportedly asked unions to accept wage cuts of up to 5 per cent to save $C20 million a year.
"It could well be the difference between a creditor protection process or not," the company said in a letter to the union cited in The Globe and Mail.
CanWest has to finalise its recapitalisation by July 15, according to a $US175 million ($215 million) credit agreement struck last month.
Under that deal, its 57 per cent stake in the Australian broadcaster is the only remaining asset it can sell without further lender approval.
First published by Smh.com.au on June 15 2009
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